Sunday, May 4, 2014

How high costs of fuel importation discourages local oil companies

High cost of fuel importation charges has been cited to be an exacerbating
factor which has been discouraging most local oil marketing companies from
participating in tender competition process through Bulk Procurement Systems
(BPS) in the country, an expert has observed. The General Manager of the Petroleum
Importation Coordinator (PIC) which coordinates bulk procurement for the petroleum
products on behalf of oil marketing companies in the country since its
inception in mid 2012, Michael Mjinja said in Dar es Salaam early this week. Mjinja
has observed that, high importation costs amounting to millions of US dollars
is a prime factor that impedes most Tanzanian oil marketing companies to meet
conditions imposed under BPS. He said due to financial squeeze coupled by less
capital for investments has made most local oil marketing companies not to
participate in the monthly tender bid competition which his firm offers for BPS
in the country. He said since BPS started, out of 31 local registered oil
marketing companies operating in the country, only two which have participated
for tender procurement. He mentioned the companies as Gapco Tanzania Ltd and
Enoc Africa Ltd both of which have ever won the tenders two times. The call by
Mjinja echoed on Tuesday this week a day when the Energy and Water Utilities
Regulatory Authority (EWURA) revoked licences of nine local oil marketing
companies dealing with wholesale petroleum business in the country. Earlier
information released by EWURA was quoted by the media as saying that, the
companies violated business principles in the petroleum sub-sector resulting
into their failure to conduct petroleum wholesale business for more than six
months consecutively as stipulated in their contract that is contrary to
provisions of Petroleum (Wholesale) Operations Rules, Government Notice No 419
of 2012. Mjinja said moment after he had
just addressed a press conference the winner of 22nd tender bid for
supply of bulk oil in the country for the month of June this year which his
firm conducted, for which a Kenyan oil marketing company known by its name
Gapco Kenya Ltd emerged the winner. Elaborating more on the company’s inability
to participate he mentioned another factor is driven on contract made between
ship owners and other logistics whose process is long and rather tiresome that
requires professional ability and experiences on how to handle them. “With all
these hardships which are compounded by less capital for investments, is an
aspect that draws back the desire of local companies to participate”, he said
adding that, there is a need for the government to empower them in terms of issuing
soft loans. He further noted that, because of this trend, his firm had decided
to reduce the bulk volume and timeframe from two months to currently one under
which the importer was subjected to accomplish the necessary laid down
logistics for importation process with a view to save local companies. However,
he said that, since the system was adopted six months ago, there have been a
number of ships flocking at the dock of the port waiting to empty their
consignments and charging between one and two USD as this is calculated per
metric ton per hour. The on-going trend has assured the nation of the constant
supply of fuel in the country bearing the fact that, an importer also
guarantees the performance bond of $ 10 million (Sh. 16 billion). He said, the
bond is to commit itself that incase it fails to meet the laid down conditions
as stipulated in the laws of importation, then it has their money confiscated
and never refunded. He added that, under these restricted conditions most oil
companies have been obeying the order and have never strayed. The revelations
prove how some oil dealers have been cheating the government and the general
public by under-declaring what they import to the country, starting with where
the oil was purchased, and a move that finally enabled dishonest dealers to
evade paying taxes. Meanwhile, statistics made available by EWURA indicates
that, bulk oil procurement has brought about an increase in tax revenue an
aspect that the firm has been indicating price quotations according to the rate
of supply. Statistics shows that, since bulk oil importation was first
introduced, there has been a tremendous increase of supply that range between 3
and 4 percent rate according to premium offered by importing oil marketing
companies in tendering processes. The system has also helped combat what is
technically known as ocean fuel loss which occurs when ferrying oil from the
point of origin to its destination. Controlling ocean fuel loss now enables the
government to have precise statistics on fuel imports. Statistics made
available shows that, it’s estimated that Tanzania uses a total of 2 million
litres of petrol, 3.9 million litres of diesel, 550,000 litres of oil jet and
190,000 litres of kerosene per day. According to EWURA, the country is
also a transit hub for oil products that are shipped to nations in the region
including the Democratic Republic of Congo, Rwanda, Burundi and Zambia.

AWARD 1

I won the second prize in policy category of the African Information society Initiative ( AISI) awards 2004 which is annually organized by the United Nations- Economic Commission for Africa ( UNECA) based in Addis-Ababa, Ethiopia. On the first photo above standing with other awardees after the Ceremony at the National Settlers monument in Grahamstown, South Africa.This was during the 8th Highway Africa Conference.The second photo shows the cross section of Jounalists from different African countries who attended the ceremony.

AWARD 2

I also won the AISI-GKP/SDC Media Award special reporting on WSIS process and Africa, and conferred with the award in Tunis, Tunisia during WSIS summit in 2005. See the photo above.

AWARD 3

Winner on the Media Competition on writing about " Stigma denial and Discrimination" associated with HIV/AIDS. This was organized by theAssociation of Journalists Against Aids in Tanzania ( AJAAT). On the Photo above President Jakaya Mrisho Kikwete of Tanzania, ( then the Minister for Foreign Affairs and International Cooperation) was the guest of honour during the award giving ceremony.This was at Maelezo auditorium in Dar-es-Salaam September 2005.

AWARD 4

Winner on the Media Competition on writing about "Vulnerable Children" associated with HIV/AIDS This was organized by the Association of Journalists Against Aids in Tanzania ( AJAAT)

AWARD 5

Winner of the National ICT Media Award organized By SWOPNET in the Country. On the photo above Morogoro Regional Commissioner, Brigadier General ( Rt) Saidi Kalembo was the guest of honour during the award giving ceremony which was held at New Sarvoy Hotel in morogoro town.I was awarded a Mobile phone and a tape-recorder.

AWARD 6

I participated in the Media Competition in writing about VCT (Voluntary Counseling and Testing) in Tanzania which was held between July 15th and October 30th 2008 whereby I emerged among the top five winners. The competition was under the program known as “Tanzania bila Ukwimwi inawezekana” which literally means, Tanzania without AIDS disease transmission is possible”. This is a program which was organizedby the Association of Journalists Against AIDS in Tanzania (AJAAT) under TACAIDS funding. In the photo, I am being presented with a certificate of participation by the Chairman of the Tanzania Commission for AIDS (TACAIDS) Dr. Fatma Mrisho in a colorful ceremony which was held on 22nd December 2008 at Tanzania Information Centre in Dar es Salaam.

AWARD 7

AWARD 8

AWARD 9

I was among the top 17 best selected students who excelled in their final examinations of the 2010/2011 academic year and awarded with the Vice-Chancellor’s prize. I scored 4.5 GPA (First Class) in BA in Journalism. Above I am being given a certificate by the Chairman of the Open University of Tanzania Board of Senate. Standing at the centre facing camera is the Vice-Chancellor, Professor Tolly Mbwette. Extreme left partly hidden is the Deputy Vice-Chancellor (Academic) Professor Elifas Bisanda. This occasion took place during the convocation meeting, a day before the graduation day at the prospective permanent headquarter of the Open University of Tanzania which is currently under construction at Bungo-Kibaha in Coast region 40 kilometers away west of Dar es Salaam city.